Tuesday, 11 September 2012

Clash of the Titans? Sir Richard Branson and Tim O'Toole face the Transport Select Committee

Yesterday I was fortunate enough to secure a place in a packed Grimond Room in Portculllis House to witness the 'grilling' of Richard Branson and Tim O'Toole by the Transport Select Committee. Of course, being a mere member of the public, I was perched on a hard bench which ran along the back wall of the room - a foretaste of FirstGroup's new class of seating as one wag remarked...

As a piece of theatre, the event lived up to it's billing. Richard Branson swept in with his large retinue and played the 'I can't believe that this is happening / I just want to do what is right for my staff and passengers' cards, whilst Tim O'Toole and Vernon Barker stayed ice-cool and basically indicated that Virgin Group were sore losers who were mis-representing what FirstGroup were offering to the West Coast Mainline franchise.

So, ignoring the heat, was any light shed upon what is actually being offered by the two sides?

Well, Richard Branson and his team emphaised that

  • Virgin were looking to make £800 million of investment in the route as opposed to their claimed figure of £300 million for First Group.
  • the benchmark passenger growth figure on which they based their bid was 7.9% per annum
  • during the extension of the current franchise, the Olympics had generated £1m benefit to Virgin as opposed to the Dept of Transport's projected £15m (which would have been physically impossible to achieve...)
  • Virgin have an absolute commitment to the new services offered - subject to the approval of the Office for Rail Regulation
Meanwhile, Tim O'Toole and Vernon Barker promised:
  • growth as exemplified by their TransPennine franchise (the 'poster child' of rail franchises)
  • 15% reduction in Anytime Standard fares by January 2014
  • an additional class 'premium standard' for those who wanted more than Standard Class BUT didn't want the Virgin First Class experience
  • use Off-Peak offers to drive up seat occupancy from Virgin's current 35% to TPE's 50% rate
  • make £350m of investment in the first five years of the franchise, then roll forward as demand require
  • Refresh the interiors of the existing fleet
  • Free WiFi
  • At-seat catering
  • Use of new media to target offers to drive business
  • staffing to stay the same for the first five years then to reflect growth AND changing patterns of use...
  • 'Shoulder Peak' travel to be tackled through use of fare pricing around peak times (NOTE the peak times are not planned to be changed)
Overall, Virgin huffed and puffed and were clearly aggrieved but FirstGroup refused to be ruffled and seem supremely confident that they will deliver. Roll on the judicial review!

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